Browsing by Author "Cunha Montenegro, Roland"

Now showing 1 - 4 of 4

Open Access
How to reach the new Green Deal targets : analysing the necessary burden sharing within the EU using a multi-model approach
(2021) Kattelmann, Felix; Siegle, Jonathan; Cunha Montenegro, Roland; Sehn, Vera; Blesl, Markus; Fahl, Ulrich
Open Access
Implementing household heterogeneity in a multi-regional technology based energy-economic model : system analysis on distributional impacts of pan-European energy and environmental policies
(Stuttgart : Universität Stuttgart, Institut für Energiewirtschaft und Rationelle Energieanwendung, 2024) Cunha Montenegro, Roland; Hufendiek, Kai (Prof. Dr.-Ing.)
The European Union (EU) set ambitious targets for the reduction of greenhouse gases until 2030 in order to achieve the 1.5C objective of the Paris Agreement. Among the measures to reach this goal, carbon pricing is a promising one as it increases the costs of polluting activities and makes the use of clean technologies more attractive. While this mechanism is already used in energy-intensive sectors, such as energy conversion and chemicals, its application on the remaining sectors of the economy is treated with caution, since economical and social outputs are unclear and might jeopardize the long-term will to cut emissions. This work aims to add on understanding the socio-economic effects of a multi-regional carbon pricing scheme with focus on the household sector. It proposes that each EU Member State implements a national cap-and-trade system, where the carbon price is defined according to supply and demand of CO2 certificates. Furthermore, four revenue redistribution mechanisms are explored: reduced consumption taxes, reduced labor taxes, equal per capita redistribution and per capita redistribution according to income levels. For the analysis, a global Computable General Equilibrium model is expanded to represent distinct income groups. This feature allows for the model to assess not only economic effects, as GDP development, but also social implications, such as income distribution and tax burden across different households. Finally, it is possible to assess whether the analyzed policies lead to a double dividend, in which emissions are reduced and GDP increases, and even a social dividend, characterized by decreased income inequality. The results indicate that no revenue redistribution scheme lead to significant improvement in GDP, but each one helps decreasing certain negative aspects of pricing carbon. Reducing consumption and labor taxes lead to the highest employment levels among the analyzed policies, while per capita redistribution helps decreasing income inequality. Additionally, consumption of electricity and fossil-fuels varies according to redistribution mechanism, which is an important input for multi-model analysis.
Open Access
Long-term distributional impacts of European cap-and-trade climate policies : a CGE multi-regional analysis
(2019) Cunha Montenegro, Roland; Lekavičius, Vidas; Brajković, Jurica; Fahl, Ulrich; Hufendiek, Kai
Carbon pricing is a policy with the potential to reduce CO2 emissions in the household sector and support the European Union in achieving its environmental targets by 2050. However, the policy faces acceptance problems from the majority of the public. In the framework of the project Role of technologies in an energy efficient economy-model-based analysis of policy measures and transformation pathways to a sustainable energy system (REEEM), financed by the European Commission under the Horizon 2020 program, we investigate the effects of such a policy in order to understand its challenges and opportunities. To that end, we use a recursive-dynamic multi-regional Computable General Equilibrium model to represent carbon pricing as a cap-and-trade system and calculate its impacts on consumption of energy goods, incidence of carbon prices, and gross income growth for different income groups. We compare one reference scenario and four scenario variations with distinct CO2 reduction targets inside and outside of the EU. The results demonstrate that higher emission reductions, compared to the reference scenario, lead to slower Gross Domestic Product growth, but also produce a more equitable increase of gross income and can help reduce income inequalities. In this case, considering that the revenues of carbon pricing are paid back to the households, the gross income of the poorest quintile grows as much as, or even more in some cases, than the gross income of the richest quintile.
Open Access
On the way to a sustainable European energy system : setting up an integrated assessment toolbox with TIMES PanEU as the key component
(2020) Korkmaz, Pinar; Cunha Montenegro, Roland; Schmid, Dorothea; Blesl, Markus; Fahl, Ulrich
The required decarbonization of the energy system is a complex task, with ambitious targets under the Paris Agreement, and related policy analysis should consider possible impacts on the economy and society. By coupling the energy system model TIMES PanEU with the impact assessment model EcoSense and the computable general equilibrium model NEWAGE, we present an integrated assessment toolbox for the European energy system capable of internalizing health damage costs of air pollution while simultaneously accounting for demand changes in energy services caused by economic feedback loops. The effects of each coupling step are investigated in a scenario analysis. Additionally, CO2 decomposition analysis is applied to identify the main drivers to decarbonize the energy system. Our results show that integrating externalities forces the system to take early action, which provides benefits on the societal level. Including macro-economic variables has a negative effect on energy service demands and generally reduces the need for structural change, which are still the main drivers of decarbonization. The tighter the models are coupled, the fewer the iterations needed and the lower the CO2 prices resulting from the carbon cap and trade system. In this aspect, an integrated view can provide valuable insights to determine efficient and effective decarbonization paths.